Engineering Economic Analysis

AnnualCash Flow Calculations 181

The EUAC may be computed for this irregular series of payments in two steps:

1. Use single payment present worth factors to compute the present worth of costJor the
   5 years.


2. With the PW of cost known, use the capital recovery factor to compute EUAC.

PW of cost- 45(PI F,7%?1) +90(P IF, 7%,2) + 180(P I F,7%, 3)

• 135(P I F,7%, 4) + 225(PIF,7%, 5)

..45(0.9346) + 90(0.8734) + 180(0.8163) + 135(0.7629}+ 225(0.7130)-

. $531

EUAC=53l(AIP, 7%,5)531(0.2439) -- $130

Bill reexamined his calculations and found that in his table he had reversed the maintenance and

repair costs for years 3 and 4. The correct table is:

Maintenance and Repair

Cost for Year

$ 45

90

135

180

225

Year

1

2

3

4

5

Recompute the EUAC.

This time the schedule of disbursements is an arithmetic gradjent series plus a uniform annual
cost, as follows:

225

180 180

135 135

..

"'10 !!II .,.... =- ~ _ .....--...-

~~-

Ii,.